I’m the Washington D.C. bureau chief for Forbes and have worked in the bureau for more than two decades. I've spent much of that time reporting about taxes -- tax policy, tax planning, tax shelters and tax evasion. These days, I also edit the personal finance coverage in Forbes magazine and coordinate outside tax, retirement and personal finance contributors to Forbes.com. You can email me at jnovack@forbes.com and follow me on Twitter @janetnovack.

Think you paid too much tax in 2010? Looking for a big break for 2011?

Thanks to the temporary tax cut deal President Barack Obama and Republicans struck last December, you can write off the full cost of purchasing a new luxury SUV—provided it’s used 100% for business and its gross vehicle weight is more than 6,000 pounds. Qualifying 2011 models include the Porsche Cayenne Turbo (MSRP: $106,000) , the BMW X6 M (MSRP: $89,200) and the Ford Lincoln Navigator (MSRP: $62,635).

If this high octane tax deduction sounds to you like an echo from the past, it is. Early last decade, there was a public furor over the “Hummer loophole” which allowed small business owners and self employed folks (including doctors, real estate agents and others with a purported business use for a vehicle) to deduct most of the cost of purchasing big SUVs.

Back then, taxpayers were exploiting Section 179 of the U.S. Tax Code – a provision designed to allow small businesses to expense (or immediately write off) small capital investments. As part of the 2003 Bush tax cuts, the maximum Section 179 write-off was increased from $24,000 to $100,000. In October 2004, after the Hummer hullabaloo, Congress limited the write-off for trucks weighing between 6,000 and 14,000 pounds to $25,000, curbing luxury SUVs’ tax appeal. (Write-offs for luxury cars were already more limited.)

But as my colleague Ashlea Ebeling explains in a story here in Forbes about smart tax moves for the next two years, an immediate SUV write off is allowed again under a different, even more generous provision of the tax code, good through Dec. 31, 2011. She writes:

Last December’s bipartisan tax deal included a temporary 100% write-off (known as 100% bonus depreciation) for new equipment placed in service by Dec. 31, 2011. This break, which is unlikely to be extended, isn’t just for big companies. “It could be significant savings for the little guy, too,” says Howard Krant, a New York City CPA. He notes that 100% bonus depreciation can be more valuable than another, longer-standing 100% write-off provision (known as Section 179) available to small businesses. That’s because you can’t use Section 179 to claim a loss.

By contrast, if you’re actively involved in running a business, you can buy new equipment, use 100% bonus depreciation to generate a net operating loss and use that loss to offset other income on your tax return. And if you don’t have enough other income in 2011 to sop up the loss, you can carry it back and get a refund check from Uncle Sam for taxes paid in a prior year. Plus, there’s no special $25,000 SUV limit as there is with Section 179.

Steve Ellis, vice president of Taxpayers For Common Sense, the non-profit group which helped stir up outrage over the Hummer loophole, expressed surprise Friday that Congress hadn’t limited 100% bonus depreciation to vehicles weighing more than 14,000 pounds. “Those who forget history are doomed to repeat it,’’ he sighed. He argues the 100% vehicle write-off should be restricted to farm equipment, panel trucks and the like. “We’re giving a Realtor an incentive to get a BMW X5 instead of buying a more fuel efficient vehicle,’’ he complained.

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The article states the write-off applies to vehicles with a gross weight of 6,000 pounds or more. Two corrections: 1. It is the vehicles GVW rating, not the vehicle’s actual weight, that determines whether the vehicle qualifies. 2. I believe the write-off is available if the GVWR is more than 6,000 pounds. Vehicles such as the Toyota Highlander whose GVWR is exactly 6,000 do not qualify.

Your point is well taken—the technical term is gross VEHICLE weight. I should have put the word vehicle in and will add it, so noone is confused. However the key point is that is the gross weight, not the CURB WEIGHT, which is a lower number.

Commuting, which is most of what a doctor or lawyer would do with their vehicle, does not qualify as business use. If non-commuting business use of the vehicle (that rare house call) is only 10% of the total, the deduction is limited to 10% of the vehicle cost.

Assuming 100% business use, any vehicle can be 100% written off, the only difference is how quickly it can be written off, all in the first year (expensed), or spread over several years (depreciated).

There’s also the issue of audit-bait. If your SIC code and other details on your return don’t point toward a business that requires a vehicle, the computer scan of your return will almost certainly flag it for an audit.

That is all absolutely true. As I said, to take 100% of the vehicle, you must use it 100% for business and no, commuting is not deductible. But as Taxpayers for Common Sense suggests, the lure of an immediate write-off versus depreciation over time is certainly enough to induce some small business folks to buy a bigger vehicle than they otherwise would. That is what makes this a questionable tax policy. It is also interesting that something Congress explicitly repealed was restored in another form without much if any public debate—which is why I wrote the blog post.

You grossly misunderstand how many professional operate. They keep an “office” in their home, then, they leave their “home office” and travel to a “satellite” office, which may be another office, a hospital, wherever they go. Any travel after leaving their “home office” is deductible.

Using this scenario, which I can guarantee you ANY good professional knows about, virtually 100% of their mileage falls under the “business use” category.

I think you’re being a bit too charitable with the term “public debate.”

Media firestorm, raising holy heck, and a few other descriptions that can’t be shared in polite company would better describe the response when the Sec 179 provision that covered vehicles 8,001# and over and specifically all excluded SUVs except those in service as a taxi, ambulance or hearse, was enacted during the Bush administration.

(To raise a technical fine point on the 8,001# and over restriction: at that time there were exactly 3 SUV models, all with negligible sales volume, that were the genesis of the of the SUV exclusion in the Bush-era Sec 179 provision – thus making this provision “the widely reported SUV tax credit that never was.”)

The larger story here is that so many policies that were decried as apocalyptic during the Bush administration, now seem to come along in far worse form, without any media attention, or as you gingerly suggest, without much if any “public debate.”

Methinks the prior uproar was far more about the man than the policy, so kudos to you for separating the policy from the politics.

OMG. Where in the hell did this ELLIOT lady get her information????? She must of did a lot of “clip and paste” from other people who “think” they know about cars. I still have a 97 VW Passat TDI that gets at LEAST 50.7 on the highway doing 80 mph. It meets Calif. Emmision regulations, and my state as well. I’m about to change the injectors and computer chip that will boost it to about 60 mpg. Your talking about a 20th century technology car, that still “out does” 21st century !!!! I’ve worked on cars over the decades, drag raced, and just “tinkered” with vehicles. I’ve owned over 35 cars in my lifetime (do the math…I’m 61) and absorbed a LOT of knowledge. Advancing “timing” on cars with large exhaust manifolds burns up over 90% emmisions. Modifying “injectors” and “jets” greatly reduces fuel burn. Increasing intake valves to let in air (an engine that breaths LOTS of air runs better)….runs smoother and better. The information is out there, you just have to apply it. And your articles only apply to cars in AMERICA. I was in Germany not too long ago, and rented a “Polo”. This is a 3 cylinder turbo diesel that gets almost 70+ to the mile. AMERICA lags behind. It’s all about money and greed. I’ve saved my money on cars……..and still laugh when I go to the pumps.

I laugh when your magazine “quotes” Comsumer Reports. Let’s see….this is the SAME people that ALWAYS rated Jap cars as the BEST, and shooting down American made cars. Where did they fail with Toyota??? I have a VW Passat and a Honda. I like the Honda, but my daughter drives it while in Law School. Dad drives a Tarus(brand new), my wife drives a Toyota. I drive a Chevy and a Ford. Which one is best???? All about equal. Even though their all differnt class of cars. My 97 Passat drives with a “heavy” feel, and is safer (only my thoughts) than my Honda. My Chevy is an SUV, and HAS been in an accident 5 years ago. It survived (repairable) whereas the Camry was a total loss. My wife drives her Corolla 4.5 miles one way to work, a good commuter car, but to drive that car long distances would be nerve rattling, for it has too much “road noise”. So, in summary, each car has it’s own personality, drive and feel. When people start writing about cars that JUST CAME onto the Market….I wonder. What test were REALLY performed on these cars, and WHAT are the qualifications of the people writing about them. It would be like compairing a Mechanic to summerize the stock market as a person who has NEVER worked on cars, to do the reports. You have to understand one thing. Cars made now, were the result of Government intervention. How’s that??? Because the public didn’t take care of their cars, and were more or less “taken advantage of”. The Government stepped in, and not only forced the BIG 3 to comply to lower the emmissions, but “tacked” on modern technology to make them run longer with little to no maintenance. In other words, “idiot proof” cars. Years ago when you had “drivers Ed”, you had to know where the oil went in, power steering, antifreeze, etc. Hell, now….kids barely know that proper tire inflation can increase gas milage, as well as tune-ups.

So you are telling me. I can buy a vehicle for my biz. make the payments on it until the end of the year. and when I file my biz tax right it off. The govt will give me a check for the total amount of the vehicle? i can then pay the vehicle off?

You can deduct the allowable (0 to 100%) portion of the cost of the vehicle from the gross profit of your business, to determine your taxable net profit, but generally not to the point of achieving a net loss on your Sched C.

I realize that the administration and the state media typically describe legitimate business deductions as if they were direct subsidies, but it doesn’t work like that unless you’re in the corn or wind-power business.